Wales politics

Scottish referendum: The impact on Welsh businesses

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Media captionWales could attract new business following the Scottish referendum

"Nobody knows anything."

That was the veteran screenwriter William Goldman's assessment of the endless predictions in Hollywood for how well movies would perform before release.

It is why small budget films become surprise hits and why all-star casts in big budget action movies flop.

Or as the writer and statistician Nate Silver put it more recently in his book 'The Signal and the Noise': "We have a prediction problem. We love to predict things - and we aren't very good at it."

Looking at the Scottish referendum debate, these words might ring true.

The pro-independence campaign stands accused of an exaggerated positivity that ignores the various pitfalls of leaving the UK.

While observers believe the pro-union Better Together campaign has lost ground because of its relentlessly negative tone.

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Image caption What will the vote mean for Wales?

Campaigners on both sides understandably want to pass off opinion as fact and possibilities as certainties in order to win over the undecided:

  • Will prices rise or fall in an independent Scotland?
  • Will joining the European Union be a simple renegotiation or a torturously long and uncertain process?
  • Will the rest of the UK refuse to share the pound with an independent Scotland or are the parties bluffing?

If it is difficult to say for certain what the impact of Scottish independence will be on Scotland, it is even more problematic to work out definitively what it will mean for the Welsh economy.

Businesses hate uncertainty. Yet there is very little else on the horizon in the near future for businesses across the UK whichever way the vote goes on Thursday.

When it comes to jobs, Cardiff - with its financial services enterprise zone - would like to attract some of those companies like Royal Bank of Scotland and Standard Life that have raised concerns about operating in an independent Scotland.

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Image caption Even if Scots vote No it is likely that a greater degree of devolution will be on the way to Scotland

But the Scottish government has pledged to peg corporation tax to 3% below whatever the UK government sets it at.

That could mean international companies are attracted to setting up in Scotland rather than the rest of the UK.

That said, Wales is already competing with all the nations and regions of the UK to attract companies from abroad.

If Scotland's membership of the EU is drawn out, or derailed, that could make Wales more appealing to businesses that want access to the European market.

Uncertain currency

But a referendum is expected to be held on whether to leave the EU if the Conservatives win the next general election.

Welsh businesses that trade with Scotland at the moment may fear that an independent country will change regulations, which means more costs to firms, and the uncertainty over what currency will be used is also a question for companies.

If the pound is not shared, does that mean there will be transaction costs? What impact would any competing currencies have on Scotland and the rest of UK's exports?

Even if Scots don't go for independence it seems likely that a greater degree of devolution will be on the way to Scotland.

That too has implications for Wales.

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Image caption Either a Yes or a No vote will usher in a period of negotiations, discussions and decisions

The referendum result is the start not the end of the process. Whether it is a Yes or a No vote, it will usher in a period of negotiations, discussions and decisions that we can't know the outcome of at this point.

That means there will be dramatic, if uncertain, changes in Wales, whichever way the result in Scotland.

For business people there will be risks and rewards.

That will mean exercising judgement, perhaps engaging in some educated guess work and being able to adapt to whatever comes along.

Beyond that, as William Goldman might say: "Nobody knows anything."

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